Water woes

Pros, cons of proposed merger weighed by residents, officials

Steamboat Springs  Consolidating the city water and sewer system with Mount Werner Water and Sanitation District should be a no brainer. The district shares three reservoirs with the city and both mainly process their water through the Fish Creek Filtration Plant. And the city-owned wastewater treatment plant collects sewage from both entities. The two even had what was termed as a living arrangement for two years in the late 1990s with offices housed together above the water filtration plant.

But the Nov. 5 ballot question asking voters to approve the merger of the two entities is the most controversial and complex issue Steamboat Springs residents will face this election season.

The agreement marks more than 10 years of negotiations between the city and Mount Werner Water. City Council President Kathy Connell believes having one entity is cost effective and efficient.

"I think that to have one entity managing the water for the entire town makes sound business sense," Connell said. "The goal here is to make the water and sewer rates as efficient and low as possible. It only makes sense."

Even the opponents to the proposed water merger agree consolidation is a good thing. Two of the men who spoke against the agreement as it went through council approval, Kevin Bennett and Bill Martin, were the presidents of past councils that attempted to negotiate a consolidation.

But the two, along with other past councilmen and a growing group of concerned residents, feel the agreement proposed before the council is not the right one.

"It could be the dumbest thing the city has ever negotiated," former Councilman Jim Engelken said. "(The agreement is) 19 pages and red flags litter this document."

Coming into the merger, the city would bring $35 million in assets and $13 million in liability, or $22 million in net value. The district would bring $18.5 million in assets and $13.1 million in debt, or $5.4 million in net value.

Consolidation would mean the city would not have to expand its maintenance building, which was expected to cost $285,000. Bob Stoddard, manager of Mount Werner Water, said that on an annual basis, savings could be achieved by sharing legal fees, office space, utilities and equipment.

But neither the city nor the district would say what the exact cost of that annually efficiency would be.

In August, Engelken filed with the city clerk a group that opposed the water consolidation agreement and November's ballot issue. The group, People Who Have Read the Proposed Water Agreement, list three concerns with the ballot issue: rates, accountability and power.

Rate equalization

Perhaps the greatest concern to the voters as they head to the polls is the question of unequal rates. Even though the city and district largely share the same water filtration plant and wastewater treatment plant, they have much different rates.

Those in the Mount Werner Water District, which lies roughly east of Fish Creek Falls Road, pay $32 per month for a four-person household using 15,000 gallons of water and sewage. The same 15,000 gallons would cost someone living in the city $69 a month, which would be $444 more a year.

The division increases for commercial properties. A commercial property in the district would pay $125 per month for 40,000 gallons and one in the city's system would pay $204, which would mean $948 more a year.

Under the current agreement, the opposition claims that inequality will remain and create a division between Old Town and the ski area.

City and Mount Werner Water officials point to the city's much older infrastructure and said outdated pipes contribute to an increase in rates.

Connell said unless the city and Mount Werner Water consolidate, rate equalization will never occur and the disparity will continue to grow. And, if those in the district thought their rates were going to automatically increase, they would never approve consolidation.

"Right now there is a very big difference in rates. If you are going to get close to and attempt equalization, you will never be able to do that if we don't consolidate," she said.

Without consolidation, she said the city users would experience a rate hike. A rate study done earlier this year proposed an increase in water rates of about 2 percent to 5 percent for the average household. But the council postponed passing the increase until voters decided on a water authority.

As the agreement was coming before the council this summer and residents expressed concerns over rate equalization, the agreement was changed so that both the city and the district would have to have an economic study done for rates to increase. And a preamble was added to state the proposed water authority intended to equalize rates in the future.

But Bennett said the unequal rats are the result of years of city subsidies. He said the district's rates are artificially low because the city allowed Mount Werner Water to take water from its storage reserves to meet the district's commitments.

He claims the city was never compensated for the millions of gallons it released in stored water. Until the district built its own storage facilities in the early 1990s, he said Mount Werner Water saved millions. He also pointed to the wastewater treatment plant, which he said the city paid for the entire cost of building infrastructure and excess capacity, but the district pays only for what it uses.

"They have received subsidies in the millions of dollars. That is why their rates are artificially low," Bennett said. "The simple fact is our citizens in Old Town have given millions of dollars in subsidies to Mount Werner Water and Sanitation."

Not only are opponents skeptical over the unequal rates, but they also point to language in the document that said service charge rates do not have to be the same for users within the district and users of the same classification within the city and urban growth boundary.

Engelken points to the Sheraton Golf Course, where he said a 1988 contract allows for the golf course to pay a annual fee of $4,000 for about 62 million gallons of water. He said it is a 99 percent discount. A combination of 300 to 350 residential users would pay more than $250,000 for the same amount, the opposition claims.

"That sort of deal will not only be accepted by this charter amendment, the language makes it clear that it is OK and nothing prevents that from happening again," Engelken said.

Accountability and power of the water board

The prospect of equal rates might be the most pressing issue for residents going to the polls, but Bennett and Engelken have just as big a concern over the makeup of the board.

"There is no efficiency in creating a new layer of government," Engelken said. "The city is perfectly capable of supplying water to the whole city. It is one of the fundamental purposes of having a city."

Under the agreement, the city council appoints three members to the board and Mount Werner selects four board members for the first terms in office. As the terms expire, the council will appoint replacements. The only way an appointed board member could be taken off the board would be through a recall election.

Connell said creating the board is a way to take the politics out of managing water. She said the board is set up to allow for the decisions of growth management to fall in the hands of the City Council.

"It states very clearly in the contract that all the policies concerning growth and where we are going are in the hands of the public and City Council," Connell said. "Clearly the only decisions the water board makes concern the mechanics of running a water and sewer system."

But Engelken has a different thought.

"Taking the politics out of water is never going to happen in the western United States," he said. "It is impossible. It is like taking the Ten Commandments out of the Catholic Church."

Bennett said the water board would still have the ability to send user bills, condemn property and pass ordinances.

"Taking the electorate out of the process doesn't take politics out of it, it takes the people out of it," Bennett said.

The opposition said the agreement would allow the board to have veto power over the City Council. Opponents also believe the board selection process would give Mount Werner Water the immediate majority, allowing for the board to put policies in place favoring the district.

They also express concerns that board members do not have to live in the city, but just own property in the city and live in Routt County. And those board members cannot be removed by the City Council, but only through a citizens initiative recall election.

Stoddard said during negotiations, discussion did revolve around whether the board should be appointed or elected.

"We talked about this issue a lot. We think the water board is really going to be a nonpolitical board," he said. "The district believes that this agreement appropriately addresses power and places limits where there needs to be limits."

Connell said this process is a safeguard for the future if someone with self-serving intentions ran for a position on the water board, spent thousands of dollars on a campaign and was elected by a largely uninterested public.

"You can't throw money toward City Council," Connell said. "The public doesn't always pay attention, but City Council has to pay attention. There is more control by City Council appointing the board."

But in his past experience in electing board members for city committees, Engelken said if the council chooses the wrong candidate for the water board, the stakes can be much higher.

"In the past when you made the wrong appointment, it was not seen as the end of the world," he said. "In this case, if you get the wrong person, it is an enormous mistake."